Masterplan Consent Areas: guidance - impact assessments

Business Regulatory Impact Assessment (BRIA) (Final)

Title of Proposal

• The Masterplan Consent Area Guidance

Section 1: Background, aims and options

Background

The introduction of Masterplan Consent Areas (MCAs) followed extensive research and consultation.

An independent review of the Scottish planning system ‘Empowering planning to deliver great places’ published in 2016 noted that the review panel was ‘inspired by the flexibility provided by Simplified Planning Zones (SPZs) and proposed their principles could inform an adaptable approach to zoning areas of land for development including housing.’ The independent panel recommended that the SPZ approach ‘be rolled out across Scotland’ as a way to incentivise development.

The subsequent public consultation paper ‘Places, People and Planning’ (January 2017) proposed making greater use of SPZs. A Position Statement (June 2017) following the consultation indicated broad support and explained that legislation would be brought forward to refresh and rebrand SPZs and allow them to be progressed in a wider range of circumstances.

The Planning (Scotland) Act 2019 introduces MCAs, the reference to masterplan in the title emphasises the placemaking role of the new upfront consenting mechanism. Planning authorities will be able to make MCAs, to support more effective delivery of development, frontloading scrutiny and aligning consents. MCAs can grant a range of consents; planning permission plus roads construction consent, listed building consent and conservation area consent – where provided for in the particular MCA scheme. Development that is in line with the MCA scheme could be brought forward without the need to apply for permission. MCAs are intended to be a flexible tool and could support a range of scales and types of development.

Whilst, the principles of the process of preparing a MCA scheme are set out in the new Schedule 5A of the 1997 Act, the following regulations provide more detail:

• The Town and Country Planning (Masterplan Consent Areas) (Scotland) Regulations 2024
• The Masterplan Consent Area Scheme (Environmental Impact Assessment) (Scotland) Regulations 2024

Purpose

The aim of the non-statutory Masterplan Consent Area (MCA) Guidance is to support planning authorities when they prepare MCA schemes. This is a new way of granting consent and will require an element of culture change - for planners to proactively facilitate the delivery of development.

The guidance is intended to bring together and explain the legislative requirements from the 2019 Act and the two sets of MCA regulations. Any further detail in the guidance is based on the broad principles that were outlined within the 2019 Act and the regulations.

Rationale for Government intervention

The proposed guidance is necessary to support the use of MCAs by planning authorities across Scotland. It will help ensure consistent interpretation and application of the legislation by authorities, whilst allowing scope for flexibility tailored to local needs.

This will help planning authorities to use MCAs as part of a proactive, place-making approach to planning and consenting – enabling the type of development they wish to come forward in their places. MCAs will contribute to the following National Outcomes contained in the National Performance Framework:

• We live in communities that are inclusive, empowered, resilient and safe.
• We have a globally competitive, entrepreneurial, inclusive and sustainable economy.
• We have thriving and innovative businesses, with quality jobs and fair work for everyone.
• We value, enjoy, protect and enhance our environment.
• We are healthy and active.

Options

Option 1: Do nothing

The National Planning Framework 4 Delivery Programme v3 (Oct 2024) outlines actions to be taken forward over the short and medium term. The delivery programme identifies that the Scottish Government will bring into force new regulations on masterplan consent areas (MCAs) and support early adopters of this important new tool, which will offer developers greater confidence through upfront consent provided by the planning authority. Failure to put the guidance in place, to support the new system will impact negatively on stakeholder expectations.

Option 2: Support the implementation of MCA Regulations through publishing guidance (Preferred option)

Under this option, guidance will be published to accompany the MCA regulations coming into force, to support the implementation of the regulations.

Sectors and Groups Affected

Businesses

MCAs will offer developers greater certainty of consent, with this being provided by the planning authority upfront, enabling them to raise necessary finance, without the risk of not securing consent.

If the developer then comes forward with a proposal which complies with the scheme, they do not have to submit a separate application for planning permission, roads construction consent, listed building consent or conservation area consent, if they were covered in the MCA scheme. This will significantly streamline processes, attract investment and facilitate developers to get on site earlier.

MCAs have potential to support a range of sectors (including housebuilding, business and industry, commercial leisure, energy and town centre operators), and at a range of business scales.

Going forward, there may be opportunities for businesses to support and collaborate with planning authorities in preparing new MCAs.

Local Authorities

Planning authorities are required to consider whether it would be desirable to make or alter an MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision.

The regulations and guidance focus primarily on procedural requirements for planning authorities to implement MCAs. The regulations were necessary to provide additional detail to the requirements set out in primary legislation and were intended to recognise the benefit in working to the principle that regulations are kept to the minimum necessary. The proposed guidance sets out much of the detail of Scottish Ministers’ expectations for implementation of the 2019 Act.

Communities

MCAs will impact on communities as they focus on the future of the places where people live, work, learn and play. The MCA preparation process provides opportunities for public involvement, so the extent that the proposals will impact on these groups will be influenced by their willingness to engage and their involvement in these processes.

Public Bodies

Planning authorities will consult with key agencies on their proposed MCA schemes.

Section 2: Engagement and information gathering

Public Consultation

Within Government

As procedural matters, falling under the Planning Act, responsibility for preparing the MCA regulations lay primarily with the Scottish Government, which has also prepared the associated guidance.

The Scottish Government commissioned research carried out by Ryden, in association with Brodies, to research the use of SPZs and barriers to their uptake, including resourcing, and to identify ways to overcome such barriers. The ‘Simplified Planning Zones and equivalent mechanisms outwith Scotland research’ was published in August 2017 and consisted of a policy and research review and case studies of comparable mechanisms of upfront consenting in Scotland and elsewhere. It included consultation with targeted interviews, from across the wider government interests including local government via the Heads of Planning Scotland, individual planning authorities, the Improvement Service, Scottish Futures Trust and Transport Scotland.

Additionally in the development of the regulations, the Scottish Government engaged with Transport Scotland, Historic Environment Scotland, the Marine Directorate and with local government planning authorities.

Public Consultation

Collaboration has informed the preparation of the consultation on the proposals for regulations and guidance. It follows on from the extensive engagement undertaken prior to the Planning (Scotland) Bill being considered by the Scottish Parliament.

An independent review of the Scottish planning system ‘Empowering planning to deliver great places’ was published on 31 May 2016. The subsequent public consultation paper ‘Places, People and Planning’ (January 2017) proposed 20 key changes, including: releasing more ‘development ready’ land, for example making greater use of SPZs.

A Position Statement (June 2017) followed the consultation paper and indicated broad support for greater use of ‘a zoned approach to development’ similar to that provided for by SPZs. The Position Statement explained that there would be legislative change brought forward that would refresh and rebrand SPZs and allow them to be progressed in a wider range of circumstances. Comments relevant to SPZs that were received via this consultation process were taken into account when developing proposals for MCA Regulations and guidance.

A public consultation on Draft MCA regulations ran from 28th February 2024 – 22 May 2024. It included the draft regulations and asked specific questions about the various proposals for regulations and guidance, covering the different stages of MCA preparation process.

62 responses were received, these were from planning authorities, key agencies and other public sector bodies, development, property and land management bodies and agents, the third sector, professional and representative bodies as well as communities and individuals. A Summary of Responses report provides a summary of common themes submitted to this consultation and some key points raised. It includes a full list of those who responded and who agreed to the release of their details. The full responses have been published online for all those organisations and individuals who gave permission to do so: Masterplan consent area regulations: consultation - Scottish Government consultations - Citizen Space.

Respondents were generally supportive of the proposed regulations. The consultation sought views on the interim assessments and specifically sought further information to assist with finalising them, including the partial BRIA. A minority of the respondents to the consultation commented on the interim assessments, and not all these comments were relevant to the BRIA.

Respondents were generally supportive of the need for guidance to accompany the regulations coming into force. The guidance addresses points respondents wished to be covered.

Some of the responses to the consultation on the partial BRIA highlighted some concern about the capacity of planning authorities and key agencies to resource the implementation of MCA schemes. It was also noted that without the ability for planning authorities to recoup costs it may be difficult for planning authorities to financially justify establishing an MCA within their area. No further information to assist with quantitative costing of the regulations was provided.

Business

The ‘Simplified Planning Zones and equivalent mechanisms outwith Scotland research’ included consultation consisting of targeted interviews, covering 25 groups, including 8 developers and consultants and a business representative body (Barratt Homes, Cairn Homes, IGLOO/BIGG Regeneration, Haus Architects, Patrizia, Pro-Vision, Scottish Property Federation, and the Wheatley Group).

The conclusions from that research shaped the provisions on MCAs in the 2019 Planning Act and have informed the approach to the regulations and guidance.

23 responses to the latest public consultation were received from businesses, or organisations primarily representing business interests. The business sectors represented were aquaculture, energy, housebuilding, planning consultancy, property and retail.

In addition to the public consultation, further engagement was undertaken with businesses and representative bodies (and their members) including through the Scottish Property Federation (SPF), the Planning Infrastructure and Place Advisory Group (PIPAG), Prosper, the Royal Town Planning Institute (RTPI) planning consultants forum, and with housebuilders and renewables developers and ports operators.

Section 3: Costs, impacts and benefits

Costs

Option 1: Do nothing

There are no costs arising from this approach.

Option 2: Support the implementation of MCA Regulations through publishing guidance (Preferred option)

In support of the Scottish Parliament’s scrutiny of the 2017 Planning (Scotland) Bill, the Scottish Government prepared an accompanying Financial Memorandum. This was updated following the Stage 2 scrutiny and provides the basis for the costs identified below.

Planning authorities already had a duty to review whether an SPZ should be prepared for any part of their area. Publishing a report on the equivalent review for MCAs is not expected to add any significant cost, particularly as it can be part of the Local Development Plan delivery programme that the planning authority is already required by legislation to produce. At the time of the Planning Bill, the costs of including the report on MCAs was judged to be between £1,000 to £2,000 for each authority per year. This is a straightforward task – the Scottish Government has since offered advice to planning authorities preparing their first statements, and drawing on that authorities have included text on their websites.

The preparation of any MCAs is optional for planning authorities, and should be based on an analysis of the costs and the benefits to be achieved. The cost of any individual MCA scheme will depend on the size of the site and its particular features, but costs may range from £15,000 to £200,000 based on existing examples, but there is no expectation that planning authorities will pay for all of these costs – this is available as a choice to them and partnership with the development sector is expected where more significant schemes are involved.

Planning authorities will have discretionary charging powers to be able to recoup their costs in preparing, or amending MCA schemes, and in considering applications to discharge conditions in the MCA scheme. A separate Scottish Government consultation focussing on wider resourcing considerations included a number of questions covering MCAs and discretionary charging. We also want to promote a collaborative approach to the production of MCA schemes, with planning authorities working in partnership with those who will benefit from the certainty of the MCA scheme (including developers, investors and business interests).

Any consultation body or public body may request a reasonable charge to cover the cost of making relevant information available which will inform the preparation of an EIA report.

Benefits

Option 1: Do nothing

There are no benefits arising from this approach.

Option 2: Support the implementation of MCA Regulations through publishing guidance (Preferred option)

MCAs would effectively enable planning authorities to grant up-front consent for planned development, offering benefits to potential investors in terms of certainty and removing much of the risk. Planning authorities will be able to use MCAs as part of a proactive, place-making approach to planning and consenting, supporting a range of scales and types of development from small scale changes up to major new developments.

MCAs will support more effective delivery of development through zoning of land, frontloading of scrutiny and aligning of consents, and allow them to be progressed in a wider range of circumstances, including within conservation areas and offer other types of consent than solely planning permission, including roads construction consent, listed building consent and conservation area consent – where provided for in the particular MCA scheme.

In addition, the effect of enabling and securing new development brings a range of benefits to a local authority:

• directly in the form of increased council tax and business rates income through attracting development and investment to their area;
• increasing the marketability of sites covered by the MCA scheme and uplift in value of any council-owned land through land sales;
• potential for planning authorities to secure financial contributions from developers for development within the zone, through an upfront coordinated approach; and
• in terms of improved outcomes for communities through supporting economic growth, and the wellbeing economy.

By way of example, this type of upfront consenting can attract significant investment, for instance the Hillington Park SPZ has attracted over £25 million investment since its creation.

Interest has been expressed by some planning authorities in using MCAs once the new provisions are available to facilitate significant development and economic activity associated with Green Freeports and Investment Zones.

Scottish Firms Impact Test

Engagement with business in the preparation of the MCA regulations and guidance has taken place through initial stakeholder involvement, a public consultation on draft versions of the regulations and guidance, and some further discussions with business representatives during the consultation period. An analysis of the responses of the public consultation on the partial BRIA is provided above.

The further engagement with businesses included renewables developers and representative bodies (and their members) including through the Scottish Property Federation (SPF), the Planning Infrastructure and Place Advisory Group (PIPAG), Prosper, the Royal Town Planning Institute (RTPI) planning consultants forum, and with housebuilders, renewables developers and ports operators.

Competition Assessment

There are no obvious impacts on competition from the guidance, and no applicable issues were raised through the consultation process.

Consumer Duty

The Scottish Government definition of a consumer is "an individual, or a business no larger than a small business, that purchases, uses or receives goods or services in Scotland, where those goods or services are supplied in the course of a business."

It is not anticipated that the guidance would negatively impact on consumers.

Section 4: Additional implementation considerations

Enforcement

The guidance sets out that planning authorities are required to consider every five years whether it would be desirable to make or alter an MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision. Planning authorities were required to publish their first statement within five years of the 2019 Planning Act gaining Royal assent (i.e. by 24 July 2024).

UK, EU and International Regulatory Alignment and Obligations

Intra-UK Trade

This measure is not likely to impact on intra-UK trade.

International Trade

This measure is not likely to impact on international trade and investment.

EU Alignment

This measure is not likely to impact on the Scottish Government’s policy to maintain alignment with the EU.

Legal Aid Impact

These changes would not affect claims for legal aid.

Digital Impact

Publicity arrangements for MCAs are explained in the guidance, including requirements already set by the regulations relating to publishing material on the internet.

Test Run of Business Forms

The guidance does not introduce any new forms for businesses etc. to complete. We will separately share templates with authorities to meet their requirements for publishing press notices when preparing MCA schemes.

Section 5: Next steps and implementation

Recommendation

The stakeholder engagement that has informed this proposal has revealed clear support to implement the provisions in the Planning (Scotland) Act 2019 on the procedures to cover MCAs. The regulations focus primarily on procedural requirements for planning authorities to implement MCAs. The recommendation is to proceed with the preferred strategy of Option 2: Support the implementation of MCA Regulations through publishing guidance.

The regulations emerged from legislative requirements set out in the Planning (Scotland) Act 2019 and following an extensive review of the planning system. The guidance aims to strike a balance between the need for clarity on one hand to support the implementation of MCAs in practice, whilst allowing a degree of flexibility to allow for best practice to evolve as MCA schemes are made.

Implementation and Delivery Plan

The National Planning Framework 4 Delivery Programme (October 2024) sets out the approach for implementing NPF4 and set out priorities for delivery in 2024/25. The delivery programme identifies the MCA regulations and supporting early adopters of this important new tool.

The Act requires that planning authorities were required to consider before 24 July 2024, and then in every subsequent five year period, whether it would be desirable to make or alter a MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision.

The Scottish Government’s 2024/25 Programme for Government commits to support early adopters to deliver Masterplan Consent Areas.

Post-implementation Review

PARD will review the statements published by planning authorities setting out whether they are making or altering MCA schemes in their areas to review take up and use of the new consent mechanism.

The MCA guidance explains the statutory procedures from the 2019 Act and the sets of regulations. We intend to engage with planning authorities, the HOPS network, key agencies, developers and other partners to identify and share good practice and to promote peer-to-peer learning as good practice develops as MCAs are implemented in practice.

The Scottish Government is committed to supporting early adopters, for example to facilitate land-based elements of offshore wind and Green Freeports and addressing the need for additional housing, and will use this to identify learning points and good practice.

Declaration

I have read the Business and Regulatory Impact Assessment and I am satisfied that it represents a fair and reasonable view of the expected costs, benefits and impact of the policy, and that these have been taken into account when making the policy decision. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

I am also satisfied that officials have considered the impact on consumers as required by the Consumer Scotland Act 2020 in completion of the Consumer Duty section of this BRIA.

Date: 6 December 2024

Minister's name: Ivan McKee MSP

Minister's title: Minister for Public Finance

Scottish Government Contact point:

Adam Henry, Planning, Architecture and Regeneration Directorate